Arizona Real Estate License Practice Exam 2025 - Free Real Estate Practice Questions and Study Guide

Question: 1 / 1505

Which of the following is NOT essential to create a valid contract?

Monetary consideration

Creating a valid contract involves several essential elements, and monetary consideration is one of these elements; however, the form that consideration takes can vary widely. In fact, contracts can be valid without the exchange of money if something else of value is provided. Consideration can be a promise to perform a service or to refrain from engaging in a certain activity, known as forbearance.

Therefore, while having some form of consideration is vital to enforce a contract, it does not necessarily have to be monetary, which means that lack of monetary consideration does not automatically invalidate the agreement. Competent parties, mutual assent (which indicates an agreement to the terms), and a lawful object (the purpose of the contract must be legal) are all critical elements that must be satisfied for a contract to be valid.

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Competent parties

Mutual assent

Lawful object

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